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In our last article entitled part #1 we discussed the apples to apples of wind and oil and gas. This article explores the apples to oranges of wind to oil and gas.
Wind energy relies heavily on financing
Many oil and gas operators and operations are self-funded and do not rely heavily on financing structure when compared to wind energy. As an owner this means that decision making on whether to grant your request while resting with a higher up does rest with the company desiring to operate on your property. By contrast, in the wind sector, financing arrangements and structures associated with tax credits or tax incentives may complicate negotiations by involving other third parties whose focus is solely financial and solely aimed at protecting their funds invested in a project.
Different Kinds of Documents
Oil and gas development and land or mineral owner agreements generally fall into two categories: lease and surface use agreement. The documents associated with wind energy include not only the foregoing, but you may also see documents additional or other documents including a good neighbor easement, meteorological tower agreement, noise easements, options, and license agreements.
Different Impacts on the Surface
Our previous article explored how surface impacts are similar to oil and gas but there many ways in which wind energy varies on the surface. Wind turbines impact properties differently than oil and gas. As a landowner you should consider things like ice throw, shadow, and flicker from the wind turbine. Reclamation issues with wind energy are more serious too – what is to happen to a leftover turbine at the end of the lease including the concrete holding it up?
Length of Time
Primary terms of oil and gas leases rarely exceed 3-5 years, or at the most maybe 10 years. By contrast, it is not unusual to see wind leases in excess of 10 years before development obligations ensue and then, extended time periods of 20 to 30 or even 50 years. Such extended time periods is a reminder to carefully negotiate the terms of wind documents as they can impact multiple generations.
Jenna H. Keller, Esq.
Attorney at Keller Law, LLC. (www.kellerlawllc.com)
The information is for general information purposes only. This should not be substituted for legal advice and should not be taken as legal advice for any individual case or situation. This information is not intended to create, and receipt or reading does not constitute, an attorney-client relationship. You are encouraged to contact an attorney for legal advice concerning the information provided.